Is this too tight of a deal?

[Stephen Collins]

Can you please take a look at my number crunching and see if mathematically I made any mistakes when trying to determine CAP, COC, and Total ROI? This was a great read and really helped me out! I know these valuations are more for multiunit buildings, I was trying to create a system of comparing "apples to apples" if I look elsewhere.

http://www.biggerpockets.com/renewsblog/2010/06/30/introduction-to-real-estate-analysis-investing/

I am being very conservative for my expenses and I know it shows, but is this deal too tight? The house is in a great market and if I can get it a little under list price, add in all the renovations I should still be about 20K undervalued, next to all the comparables in the neighborhood.

[Matt Schelberg]

One thing I noticed... your reserves for replacement are too high becuase you base depreciation on "remaining life" rather than total expected lifespan. So you are budgeting to replace the roof and HVAC every 10 years. This is almost certainly too short for the roof, and probably too short for the HVAC.

Even if the roof only has 3 years left, this is a one time expense to replace, not something you would need to do every 3 years.

Adjust the expected roof lifespan to 20 or 30 years and you will have a more accurate estimate of expenses. Might bump up your cashflow 20 or 30 bucks per month.

One question: What are property taxes and where are these represented in your numbers?